BharatPe has said that partnering Centrum Finance in a new bank, as part of the PMC bank rescue, will enable it to provide a tech platform for all fintechs.

Resilient Innovations, the tech company that owns the BharatPe trademark, will bring in half of the Rs 900-crore startup capital that will be needed to set up a new small finance bank together with Centrum Financial Services, which will take over the failed PMC Bank. Centrum will contribute its share, which will include assets of the non-banking financial companies (NBFCs) that will be transferred through a slump sale to the proposed small finance bank.

BharatPe group president Suhail Sameer elaborated how the banking operations will dovetail with BharatPe’s merchant-acquisition business, which will be distinct from the bank. The new bank will be truly digital and solve the banking technology and stack issues that fintechs face by providing them application programming interface (API) integration.

“What we will bring is the tech platform. This allows us to build products that will be relevant for the fintech universe… build products that a cred or Zeta could use and benefit the wider ecosystem. Given that we own the bank one way or the other, the benefits will flow to us,” says  Sameer.

For BharatPe, the integration would mean that merchant acquisition becomes seamless by addressing issues such as KYC, which currently takes time. “Our loan offer generation and closure will become seamless. Generating deposits for the bank will become easier by creating current accounts and savings accounts,” said Sameer.

He added that this will enable BharatPe to offer products like credit cards and overdraft facilities for merchants, which they were not able to do earlier. “We can democratise credit to the small merchant and share customers with the bank without fear of losing them. The bank, meanwhile, can rely upon us for credit underwriting as we are 50 percent shareholders. The integration will improve the bank’s underwriting ability,” he added.

While the new bank will start with a stock of loans due to the integration of Centrum, both partners are clear that the way forward will be digital. This will require an overhaul of the IT system, but the new bank will run on the existing core banking platform and add functionality by adding IT services from other providers. BharatPe expects to start on-boarding merchants to the bank within six months. “We acquire around four lakh merchants every month. Even if a fourth of them are onboarded to the bank, it will be one lakh additions a month,” he said.